All posts tagged Gaming

The chips are down in the battle for Australian casino company Echo Entertainment Group.

The owner of Sydney’s “The Star” casino and casinos in Queensland state lost its chairman, John Story, on Friday following a bruising campaign against him by key shareholder Crown – backed by billionaire James Packer — but also picked up a new shareholder in Singapore casino operator Genting Singapore.

This time it’s official – Wynn Resorts Ltd. has won approval for its new casino in Macau.

Wynn’s Hong Kong-listed subsidiary Wynn Macau Ltd. said Wednesday it had received the official go-ahead from the Macau government for its concession on the Cotai strip of land, allowing it to break ground on the 51-acre site.

Wynn’s announcement comes after the company erroneously filed a statement in March to the Securities and Exchange Commission saying it had received final approval for the project, sending shares of Wynn Macau up 6%. The filing was in fact the doing of a clerk at law firm Skadden, Arps, Slate, Meagher & Flom LLP.

Casino operator Genting Singapore has plenty of chips to play after raising over $1.8 billion since February. That’s led to speculation an up to 4.5 billion Australian dollars (US$4.7 billion) bid for ASX-listed Echo Entertainment may be on the cards.

Echo, which owns the just revamped The Star casino in Sydney, is widely viewed as a sitting duck since its was spun out of Tabcorp last year. It has a reasonably open share register, with Australian gaming and media tycoon James Packer its biggest holder with a 10% stake.

The new property sits on the reclaimed strip of land known as Cotai, down the road from its flagship Venetian Macao casino and away from Macau’s main peninsula area. It’s the second gambling complex to open in the past year, after rival Galaxy Entertainment Group Ltd. opened its $2 billion estate, the Galaxy Macau, in May. That project added 2,200 hotel rooms to Macau, as well as a rooftop wave pool – and the territory’s first modern multi-screen movie theater.

Sometimes it’s good enough when a company just makes a profit in this sort of tough global economic climate. And yet sometimes it’s not even good enough when they triple it.

Macau casino operator Galaxy Entertainment Group Ltd. said in its results Thursday that it made a net profit of 3 billion Hong Kong dollars ($387 million) last year. Far from sending the stock rocketing, it fell as much as 5.2% in Hong Kong after its profit came in below analyst estimates, before gaining back some ground to finish down 0.8%.

A lone clerk at U.S. law firm Skadden, Arps, Slate, Meagher & Flom LLP is shouldering the blame for telling Wynn Resorts Ltd. investors in a statement to the Securities and Exchange Commission that the company had received final approval for a project in Macau when, in fact, it hadn’t.

Wynn Resorts investors have now had a few days to digest the drama of Steve Wynn’s falling out with his business partner Kazuo Okada. The reality of a long, hard legal slog ahead is dawning on them.

After jumping 6% on Monday as news of Wynn’s investigation into Mr. Okada’s dealing in the Philippines broke, Wynn Macau Ltd.’s shares in Hong Kong have fallen to HK$20.50 on Wednesday, giving back almost all those gains. Wynn Resorts soared more than 6% on Tuesday in New York, as markets were closed on Monday.

Meanwhile, Mr. Okada’s Universal Entertainment, which lost 21% in the last two sessions, is up 9% on Wednesday.

When Vegas gambling mogul Steve Wynn turned to Japanese slot and pachinko machine tycoon Kazuo Okada for a financial investment more than a decade ago, Mr. Okada was one of the wealthiest men in Japan. In 1999, he paid over Y2.5 billion in income tax as the nation’s top individual taxpayer, according to multiple Japanese media reports at the time. He was listed on the 2010 Forbes billionaire list as the 21st richest person in Japan — No. 937 globally — with an estimated net worth of Y90 billion. Continue reading on Japan Real Time.

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Dealpolitik is Ronald Barusch's strategic look at deals currently making the headlines as well as the major forces at work in the deal-making world. He was a M&A lawyer with Skadden, Arps, Slate, Meagher & Flom for over 30 years. He retired in 2010 after 25 years as a partner at the firm. Click here for his current and archived columns.